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Insurer provides HIV+ cover

Bruce Cameron—Personal Finance
December 3, 2005

The life assurance industry has come a long way since the early days of the HIV/Aids pandemic when it initially showed about as much sensitivity as has been displayed by Health Minister Manto Tshabalala-Msimang. Effectively in those days if you died from Aids, your policy would not pay out.

Fortunately, the life assurance industry has moved beyond this. Last year the Life Offices Association (LOA) drew up a code of conduct stipulating how life assurance companies should conduct themselves when dealing with HIV/Aids.

A major element of the code is that life companies cannot apply exclusion clauses for people who contract HIV after a policy has been issued, and die of Aids later.

The problem, however, was for people who were already HIV-positive when they required life assurance cover.

Three companies, Metropolitan, Old Mutual and Sanlam, made valiant attempts to produce policies for people who were HIV-positive but the benefits they offered were limited, the costs were high and, as a result, few people took up these policies.

The problem with these initial policies was that there was too little information available to the assurers on the average expected life spans of people who are HIV-positive at a time when there were no medicines that could keep the HIV virus at bay.

Cover for HIV Sufferers

Today, there are medicines available which extend the life spans of the HIV-positive beyond what was possible in the early days of the pandemic.

This week, marking International Aids day on Thursday, a little known company AllLife launched a range of innovative products for people who are HIV-positive.

AllLife, a local company that designs, distributes and administers life assurance products, has developed three pure risk policies for people living with HIV.

The AllLife policies are being offered to people who are HIV-positive and who are prepared to take required steps to ensure that they prolong their lives.

Anti-Retrovirals

Taking steps to prolong their lives means taking anti-retrovirals and not some concoction put together by either vitamin salesman, Matthias Rath or the Minister of Health.

Premiums are based on the policy-holder’s state of health and adherence to prescribed treatment programmes.

The policies are underwritten by Nova Life Partners, Santam’s black economic empowerment life insurance subsidiary. Gen Re has provided reinsurance for the product.

Ross Beerman, the managing director of AllLife, told Personal Finance’s deputy editor Laura du Preez that the steps people need to take include taking regular blood tests to monitor their HIV levels, embarking on and keeping to a prescribed course of anti-retroviral medicines.

By offering the policy to people who will meet these requirements to stay healthy, AllLife has been able to reduce the cost of the life cover for people living with HIV and Aids.

AllLife will remind policyholders to go for their blood tests every six months and as long as policyholders comply and the tests show that they are taking their anti-retrovirals, their cover will continue. If the blood tests show that the anti-retroviral treatment is not working, policyholders will be expected to visit their doctor and change their treatment to one that is more effective.

Regular blood tests

Beerman says if a policyholder's blood tests show that he or she is not taking anti-retrovirals and his or her cover is terminated, the policyholder can appeal against the decision.

The appeal will be reviewed by the South African HIV Clinicians Society.

Policyholders are free to use any healthcare provider, including state facilities, to get anti-retroviral therapy and the blood tests.

The policies are not available to people who have Aids as defined by the World Health Organisation (WHO), a member organisation of the United Nations - this means people who have a CD4 count of less than 200 or who have any of the defining illnesses associated with full blown Aids as determined by the WHO.

Beerman says anyone who has a CD4 count of less than 200 can take anti-retrovirals to increase their CD4 count and then they will be able to take out an AllLife policy.

The company is offering three types of policies:

  • A whole life policy for people who want cover until they die - this is the most expensive
    policy;
  • A cheaper term policy which offers cover for either five or 10 years; and finally,
  • Home loan cover which is linked to the amount of your home loan and reduces as your home loan balance reduces. This is the cheapest cover.

Beerman says that AllLife originally designed the policies for people who are HIV-positive with a view to the policies being administered by one of the life companies. But it soon realised that the life companies' administration platforms are not designed to communicate with policyholders.

Direct sales

AllLife then developed its own administration systems capable of managing communication with policyholders. Beerman says because policyholders often want to keep their HIV status confidential, they can choose the communication channel - telephone, fax, mail or SMS - that they prefer.

AllLife is selling the policies direct and not through advisers as it says this enables it to keep the policy costs down and to ensure confidentiality.

Beerman says he is confident the policies offer the cheapest life assurance to people living with HIV.

Chronic illness cover

The policies are definitely more expensive than those offered to people who are HIV-negative, he says, but the cost of the cover is similar to the cost of cover for someone with a chronic illness such as diabetes.

Beerman says that AllLife's policies have moved HIV from being an uninsurable disease to being a chronic illness.

He says R100 000 of whole life cover costs between R200 and R700 a month. The maximum would apply to a policyholder who was a 59-year-old man with a CD4 count of 200 and a heavy smoker and drinker.

AllLife has made a significant contribution during a significant week in the year.

Published on the web by Personal Finance on December 4, 2005.

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